Bitcoin Trade Volumes Beat YTD Average As Inflows Resume: Are Bulls Taking Over?
Bitcoin, the world’s largest cryptocurrency, has had a few progress and setbacks in the past year. This has been reflected in digital asset investment products. However, new data shows that while outflows from digital investment products have dominated for another week, Bitcoin has shown some resilience to record a weekly inflow of $3.8 million.
Bitcoin Trading Volume 90% Above The YTD Average
In its latest report on digital asset investment products, Coinshares has shown Bitcoin investment products received net inflows despite the whole market seeing minor outflows. During the same time period, trading volumes spiked to more than 90% above the YTD average.
Regulatory issues have bombarded BTC in the past week, and the asset has shown uncertainty about what’s next to come. In particular, August concluded with a Bitcoin setback as the SEC announced a decision to delay its ruling on some Bitcoin spot Exchange Traded Funds (ETFs) applications.
As a result, the price of BTC dropped from $28,000 to $25,400 in the space of 48 hours. But despite this decrease, digital asset investment products trading volume reached $2.8 billion.
Outflows in digital asset funds have been consistent for the past seven weeks, totaling $342 million. Last week, chains like Polygon and Ethereum saw outflows of $8.6 million and $3.2 million, respectively, contributing to a total net outflow of $11.2 million across all assets.
On the other hand, Bitcoin registered net inflows of $3.8 million. Solana also registered net inflows of $0.7 million, bringing its inflow streak to nine consecutive weeks. However, total assets under management (AuM) have fallen 48% from this year’s peak.
BTC price loses $26,000 support | Source: BTCUSD on Tradingview.com
Is A Shift Toward Positive Sentiment Imminent?
The uptick in activity and investment is a good sign for the market and hints at growing mainstream interest in Bitcoin. However, this could end up being short-lived. Considering BTC is just like any other asset, sentiment is mostly based on news surrounding the crypto industry. So a consecutive weekly inflow to Bitcoin digital asset funds would suggest a change in sentiment.
The outlook for BTC and the broader crypto market for the rest of 2023 is still cautiously optimistic. Experts from JP Morgan have predicted that the SEC will be forced to greenlight several spot Bitcoin ETFs, and former US Securities and Exchange Commission (SEC) Chair Jay Clayton, has also called the approval inevitable.
Nevertheless, the past 24 hours have seen the trading volume of Bitcoin increase by more than 11% to reach $10.87 billion. Of course, higher trade volumes don’t necessarily mean prices will skyrocket. But they show more people are buying and selling BTC, indicating stronger sentiment and momentum.
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